We are dispensing with the usual market readings today morning,
because we feel a great NEED to discuss Stop Losses with you.
Market readings might follow in driplets later during the day, OR we
may just come out with the Evening Edition. Hopefully you will not
mind this small modification in the routine and will like what we
have on offer today morning.

TALKING ABOUT STOP LOSS
The most rudimentary set of Trading Rules lay justifiable stress on
the importance of cutting Loss on trades that go wrong. And trades
tend to go wrong more often than we would like. There is very little
guidance available, however, on the How-When-Where regarding
Stop Losses.

We would like to share some of our experiences today with you,
Dear Readers, for whatever they might be worth. Your comments
and feedback are welcome.

In the second case, where we continue to believe in our directional
reading but want to re-establish the trade at a better level, the
follow up action required is to, in fact, Sell or Buy again (as the
case may be) at a better level.

We, personally, are not too good at following through on a Stop
Loss. But, we did not do too badly in the last few days. You might
recall we had sold $250K against JPY at 131.70 on 11-Apr-02.
Thereafter the market went up to 132.40 on 15-Apr and came down
to 131.36 on the same day before moving up back up to 132.20+
on the same day. We stopped out of our $250 K Short (entry
131.70) on the way up from 131.36 at 131.80 on 15-Apr but re-
established the Short at 132.10 (albeit a smaller amount of $200K).
Of course, the Market was magnanimous enough to give this one
to us and we are grateful to it.